An investor buys a house for £110,000. 2 months later, the investor spends £10,000 to renovate the house. One year after buying the house, the investor sells it for £157,000. If the interest rate is 5% p.a, what is the net present value of this cashflow? £ Enter an answer correct to £1. An investor invests £10,000,000 in a new factory, which takes a year to build. After construction is finished, the factory will generate an income of £142,000 monthly, received in arrears, for 13 years Compute the net present value of the investment project at an interest rate of 5% p.a. £ Enter an answer correct to £1,000.

An investor buys a house for £110,000. 2 months later, the investor spends £10,000 to renovate the house. One year after buying the house, the investor sells it for £157,000. If the interest rate is 5% p.a, what is the net present value of this cashflow? £ Enter an answer correct to £1. An investor invests £10,000,000 in a new factory, which takes a year to build. After construction is finished, the factory will generate an income of £142,000 monthly, received in arrears, for 13 years Compute the net present value of the investment project at an interest rate of 5% p.a. £ Enter an answer correct to £1,000.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Ashvini
Two years ago, Lou Marshall, Inc. deposited $18,125 in an investment account for the purpose of buying new equipment four years from today. Last year, it added another $20,212 to this account. The company plans on making a final deposit of $17,503 to the account today. How much will be available when it is ready to buy the equipment, assuming the company earns 13.27% APR on its invested funds? Choose the closest amount. $118,681.22 $92,502.23 $91,918.47 $104,777.28 $72,097.87
Akeem Joffer hopes to a new cabin on Webb Lake in Maine. Akeem has $13,000 saved today and wants to save $7,000 every year for the next nine years. Assume Akeem can earn 11% on his investments. Compute the amount Akeem expects to have available to purchase the cabin in 9 years. 5. Reggie Hammond has $300,000 in cash located in a suitcase in the trunk of his car.Reggie deposits this amount in Gibraltar Bank. The bank offers a 6.7% annual rate and pays interest quarterly. Reggie hopes to have $1,600,000 at the end of five years. Compute the quarterly savings Reggie must deposit into this account in order to achieve his goal. 6. Billy Ray Valentine promises to pay his friend Louis Winthorpe a deferred annuity of $60,000 beginning in year five and continuing through year eleven plus a three-year deferred annuity of $7,000 that begins in year 15. Interest rate is 8.2 % . Compute the amount Billy Ray needs today to fulfill his obligation to his friend
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En Sahak wants to buy a new boat in 7 years. He expects the new boat will cost RM28,000. En Sahak has RM18,000 in an investment account today. What rate of return must En Sahak earn on his investments to be able to buy the boat on time?
Mr. New Retiree is about to retire after an illustrious career in the Zambian civil service. He is expecting to receive a net of K2.5 million in retirement benefits. As an Investment Advisor, you have been approached by Mr. New Retiree to advise on the options available for him to consider. Advise on the main asset classes available in Zambia clearly showing the common investment time horizon for each. What is the most money you could make over the next year?
The store owner hires 2 sellers with a total payment fund of 150 thousand rubles per year. Pays a monthly rent of 60 thousand rubles. He invested his own capital of 300 thousand rubles in the business, donating 30 thousand rubles per annum, which he would have had with another placement of capital. He estimates his entrepreneurial talent at 100 thousand rubles a year. A large trading company offers him a place with a salary of 200 thousand rubles a year. Calculate the amount of accounting and economic costs and draw conclusions.
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Solve the following problems. You must show all your solutions -Draw the cash flow diagram for each problem -use interest rate with five decimal places. -Box your final answer and upload the picture of your complete solution.
Assuming that the interest rate is 5% and will remain at that value indefinitely:
Q20. An investor has £200,000 in cash which they are looking to either use to buy a house for renting out, or else investing in Acme Incorporated (a company with a similar risk profile to housing). Assuming that the house comes with maintenance expenses of £2,000/year (and there are no equivalent costs for the Acme investment), answer each of the following. a) If rent for £200,000 houses is £500/month, and if the expected return on Acme is 6%/year, what rate of change in house prices must the investor be expecting? b) If rent for £200,000 houses is £750/month, and if the expected return on Acme is 6%/year, what rate of change in house prices must the investor be expecting?

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